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SOURCE: Press and Public Affairs Bureau


PANEL APPROVES SUBSTITUTE BILL ON SUSTAINABLE FISCAL FRAMEWORK FOR THE MUP SEPARATION, RETIREMENT AND PENSION BENEFITS


 

09 June 2021 05:41:56 PM

The House Ad Hoc Committee on Military and Uniformed Personnel (MUP) Pension System approved Wednesday, subject to style and amendments, the Substitute Bill to 16 bills, which would create a sustainable fiscal framework for the separation, retirement, and pension benefits of the military and uniformed services personnel. The bill also seeks to provide mechanisms for the disposition of government assets for this purpose. In his presentation on the need to pass the bill, Ad Hoc Committee Chair and Albay Rep. Joey Salceda cited the government’s three major fiscal problems namely, the: 1) MUP pension liability, 2) Government-Owned and -Controlled Corporations (GOCC) debt which were absorbed by the Bangko Sentral ng Pilipinas, and 3) Power Sector debt (PSALM). He said the MUP pension liability amounts to P9.6-trillion or 53.4 percent of the 2020 nominal Gross Domestic Product (GDP). The resolution to the MUP pension liability problem was made apparent in 2004 through then President Gloria Arroyo’s directive to study the pension system, Salceda said. The first bill on the matter was filed in 2006. According to Salceda, currently there is no management framework on the problem. There is also no asset backing for the MUP pension liability, he added. Salceda warned that a no-reform scenario could be devastating to the economy in the long-run. For one, he said the long-run growth will be hampered as government liabilities become fiscally unsustainable. This will result in the contraction of the economy by as much as negative 7.2 percent in 2030, he said. Salceda, one of the authors of the proposed “Military and Uniformed Personnel Pension Act” said among the reforms proposed in the bill are : 1) complete discontinuation of automatic indexation, but this can be periodically reviewed and increased to a maximum of 1.5 percent; 2) pension will be received at the age of 56; 3) MUP assets to supplement budget for pension costs; and 4) MUP Trust Fund Committee to administer MUP pension while the GSIS would function as fund manager. Defense Secretary Delfin Lorenzana, Phililippine National Police Director for Comptrollership Brig. Gen. Rodolfo Azurin Jr., Philippine Navy Rear Admiral Chief of Staff Nichols Driz, Committee on National Defense and Security Chairman Rep. Raul Tupas and Committee on Public Order and Safety Chairman Rep. Narciso Bravo Jr. all batted for 56 as pensionable age instead of 60 as earlier proposed. Marikina City Rep. Stella Quimbo urged the Ad Hoc Committee to look at the figures again with more realistic assumptions, particularly on salary increases with emphasis on frequency and rate of increase. The Ad Hoc Committee will again meet on June 16 and discuss the committee report with officers of the AFP and the PNP.

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